Pockets Emptied at Warp Speed

Over at RealClear Markets is a piece in which John Tamny makes his case that Former President Trump's program to ramp up vaccine production was cronyism.

We're talking about Trump here, so you won't catch me saying this didn't involve cronyism. And I don't quite agree regarding the market for a vaccine: This new disease is enough of a crap-shoot that I know I don't want to catch it, or at least not until I have had a vaccine.

What I find interesting, and would look more closely into is the following:

Image by JP Valery, via Unsplash, license.

[S]uch a response is yet another reminder that as opposed to a "great success," the collaboration between the federal government and Big Pharma is not much more than a political mugging: absent vaccinations that aren't crucial for the vast majority, lockdowns and limits on business/life activity will have a forever quality. And oh by the way, we'll be reaching into your pockets to get the funds to pay Big Pharma to produce that which would have little market purpose absent lockdowns foisted on the citizenry by politicians on the local and state level, and subsidized on the national level.

Again, please ask yourself how many pharmaceutical companies would have spent and worked at "warp speed" to produce a prophylactic against a virus that most either don't know they have, or don't feel lousy enough to know if they have it? A virus that spread around the world for months without the vast majority of the world's inhabitants knowing? The questions answer themselves, at which point the unseen is worth considering. [bold added]

The answer, all things being equal is, at least one: Due to its work with mRNA vaccine technology, which is a field with abundant other opportunities, Moderna had formulated a vaccine in January of last year.

The real and related question, is why did we still have to wait so long for this vaccine? I blame the FDA and America's medical liability situation for (a) preventing those willing to risk an untested vaccine (or participate in challenge trials) from doing so (which would have accelerated the testing process), and (b) simultaneously making medical products more expensive and less profitable due to liability concerns. And then there is the fact that the idea of offering the first vaccines to the highest bidder, though mooted, was never really on the table.

Tamny's larger point stands, and indeed my apparent difference with him actually strengthens his main point: With all the government controls in our economy, real incentives get suppressed and perverse incentives grow like weeds -- to the point that it is not an absurd argument that we would need dumpsterloads of government money to fund the artificially expensive (and low-return!) enterprise of vaccine development.

We got lucky: The actual cost of vaccine development happened to be relatively low in Moderna's case, because it could piggyback on a new technology applicable to the problem. But government controls impeded the roll-out of the vaccine every step of the way and the disastrous and unjust "lockdowns" have made made very plausible the illusion that everyone needs it pronto.

What would have happened in a truly free economy? It is impossible to tell, but under a regime of test-track-isolate (i.e., actual quarantine), and with it, the government getting out of the way of antigen testing, it is quite possible America could have spared itself from (or quickly arrested) this epidemic -- allowing plenty of time for at-risk individuals to get shots, with the wealthiest of those going first, and others being able to get vaccinated as production costs dropped naturally and prices went down.

-- CAV